Our Voice: Tribal gas tax exemption creates several challenges

What is considered fair to the descendants of Native Americans mistreated by the United States government may not always seem fair to the rest of us. Treaty rights are a charged issue, with feelings running strong for those entitled to the rights and for those who think they are an antiquated and unfair advantage. The fact that treaty rights exist is indisputable. How they are interpreted is another matter.

Issues around hunting and fishing rights and casinos are common topics. Seasonal issues come up surrounding fireworks — what can be sold on a reservation is not often legal to possess once removed from the sovereign nation. Tobacco is another hot commodity because tobacco sold on the reservation is exempt from tax, making the price significantly cheaper.

Gas prices rose last week as part of the first phase of the new gas tax levied for transportation projects. At about the same time, a Yakima County Superior Court judge was deciding treaty rights exempt a fuel distribution company owned by a member of the Yakamas from state taxes. The judge also said the business is exempt from standard business licensing requirements.

Premium content for only $0.99

The Cougar Den, owned by a Yakama businessman, operates as a wholesaler and is licensed by the tribe.

The company buys gas tax-free in Oregon and brings it to the Yakama reservation, where it distributes it to gas stations, including some owned by tribal members. The fuel is then sold at a discount to the public.

With our state’s gas tax at 44.5 cents a gallon, the exemption offers a significant competitive advantage. It could spell doom for some gas stations near the reservation who must comply with state tax and licensing requirements.

The judge based his decision on a clause in the Yakamas’ 1885 treaty protecting freedom of travel. That clause was interpreted at the time of the treaty to protect the right of tribal members to trade freely as they had always done. The challenge, especially where a distributor is involved, is making sure the only end user who benefits from the exemption is a tribal member. It’s widely known proof of tribal membership is not normally required for tobacco purchases. It’s safe to say checking eligibility at the gas pump will be even more problematic.

For now, the ruling of the judge is a victory for the tribe. An appeal is most likely coming once the ruling is formal, and this case will almost certainly head to the state Supreme Court. It’s a significant enough issue to potentially wind up in the U.S. Supreme Court. In the meantime, the state should be looking at ways to take action against nontribal members who buy untaxed gasoline and those who sell to them.